Amid the coronavirus pandemic, the food delivery big-shots like Swiggy and Zomato have been undergoing massive losses and gigantic layoffs.
With people staying in their homes, more and more population is acting cautious of ordering pre-cooked food, no matter how much of a pain it is to cook by themselves. The Covid-19 has not only affected the economy but also people’s state of minds.
Notwithstanding the downfall in sales registered in the online food market, Amazon is joining India’s online food delivery market.
Amazon’s Entry into the Online Food Delivery Sector
The online e-commerce giant Amazon, has now decided to foray into the online food delivery sector of the country. Reports are, it has been looking forward to make its entry in the Indian market since a long time.
It’s highly peculiar that the giant has chosen this time of all to spread its wings in the food delivery business, and we’ll tell you why.
The top local players Swiggy and Zomato have reduced their workforce to steer through the coronavirus pandemic and months after Uber Eats’ exit from the nation.
‘Amazon Food’ and its Investment in the Indian Market
The e-commerce giant has entered the Indian market by investing over $6.5 billion in India. Yesterday, the company made its entry into the food delivery service, called Amazon Food in some parts of Bangalore.
Despite having plans to launch its Amazon Food services pan India last year, the company resolved to cover only a small radius of some parts of Bangalore, after pushing the launch date to yesterday, even though it was looking forward to launch in March but had to delay it amid the nationwide stay-at-home order the Indian government issued in late March.
According to an Amazon spokesperson, Amazon customers have been asking the company that they’d want to order prepared meals on Amazon in addition to shopping for all other essentials. This is of great relevance especially during such stay-at-home periods.
Amazon continued by saying that they recognize that local businesses need all the help they can get.
They are launching Amazon Food in select Bangalore pin codes allowing customers to order from handpicked local restaurants and cloud kitchens that pass their high hygiene certification bar.
The company did not say how soon it plans to expand Food across India.
Amazon Food’s Strong Competitors
It is not an enigma that Zomato and Swiggy are pretty much the only two strongest arms of the Indian online food delivery business. They have established a duopoly in the market.
However, considering the massive size and age of Amazon, it is quite possible that the latter will cast a strong blow to the two unicorns of the country.
Amazon’s foray into the sector could create new challenges for Swiggy and Zomato- a 11-year-old startup that acquired Uber’s Eats business in India in January this year and Google-backed Dunzo.
Along with this, Swiggy and Zomato having raised more than $2 billion together, are still not profitable and are losing more than $15 million each month to acquire new customers and sustain existing ones.
Amazon has launched Amazon’s Prime Now and Amazon Fresh platforms in India to sell perishables and grocery items in recent years and expanded its warehouses in several parts of the country along the way.